Rupee faced a marginal depreciation of one paisa against the US Dollar in the interbank foreign exchange market on Friday, closing at Rs138.24 compared to the previous day’s close of Rs138.23.
The fluctuation is attributed to heightened demand for the US Dollar, primarily driven by increased requirements for import payments and corporate transactions.
Dealers reported that the demand for the US Dollar remained elevated in the currency market, influenced in part by the weekly holidays. The interbank foreign exchange market initiated trading within the range of Rs138.30 and Rs138.40. The day’s high was recorded at Rs138.35, while the low touched Rs138.20 before concluding the session at Rs138.24.
While the depreciation is marginal, it reflects the dynamics of the foreign exchange market, where demand and supply forces play a pivotal role in determining exchange rates. The increased demand for the US Dollar for import and corporate payments during the week contributed to the observed fluctuations.
The open market, however, exhibited stability in the exchange rate. The buying and selling rates for the US Dollar in the open market remained constant at Rs138.00 and Rs138.50, respectively, mirroring the levels recorded the previous day. This suggests that the slight depreciation was primarily confined to the interbank market.
Market analysts indicate that such fluctuations are not uncommon and are often influenced by short-term factors, including the demand for foreign currency for various transactions. Weekly variations in demand, combined with external economic factors, contribute to the day-to-day movements in exchange rates.
The stability observed in the open market suggests that the impact of the depreciation was localized to the interbank market, and the broader foreign exchange landscape remains relatively stable. The open market rates are reflective of cash transactions and free-market dynamics.
While the Pakistani Rupee has shown signs of recovery in recent weeks, it remains subject to the influences of global economic conditions, geopolitical developments, and domestic economic policies. The central bank and relevant authorities will continue to monitor market trends and take necessary measures to ensure the stability of the currency.
As Pakistan continues its efforts to strengthen its economic position and attract foreign investment, the currency market will likely remain dynamic. Investors and market participants are advised to stay informed about market developments and adapt their strategies accordingly.
The Pakistani Rupee’s resilience in the face of periodic fluctuations is a testament to the efforts of economic stakeholders and policymakers to maintain a balanced and stable foreign exchange environment. As the country navigates economic challenges, the adaptability of the currency market plays a crucial role in sustaining confidence and fostering a conducive business environment.
